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Holden's last hurrah

18/3/2020

14 Comments

 
PictureThe Holden proving ground is the perfect
parting gift to Australia for GM.
By Tim O’Brien
 
THE Lang Lang Holden Proving Ground is 877 hectares, slightly more than 2000 acres, most of it preserved bush. In a region which, once densely forested, has now just remnant pockets, the site is a unique parcel of West Gippsland coastal forest.
 
It is ideal for preservation for the environment and as habitat for endangered flora and the wildlife which once ranged this region. With the right government support, it might also be purposed for wildlife tourism, for indigenous culture and education, for complementary leisure activities, and as a research centre and breeding ground for wildlife affected by bushfire. This region is a centre for nature research and internationally famous for its wildlife tourism.

​Given the loss of habitat in the West Gippsland region generally, and the recent vast losses of wildlife and habitat along the length (and inland) of the east coast, the 2000 acres of coastal forest covering this site makes it too valuable an asset to lose “to the property market” – too valuable to the local and broader environment and too important to the threatened species of the Westernport region.

We can't risk losing it, and there is more than a strong case that GM-Detroit should gift it to the people of to the people of Victoria, to the Bass Coast region and to the original owners, the Bunurong Nation.

The GM Holden subsidiary has benefited from Australian taxpayer support for all its 60-plus years in this market. Its manufacturing operations began with a £1 million grant to General Motors in 1947 from the then Chifley Government (equivalent to $62 million today). For the next four decades its profits were wholly protected behind a tariff wall.
 
It was, and remained, a wholly owned subsidiary of GM-Detroit. Since 2001, it has received $2.17 billion in direct state and federal government assistance, and yet, as shown by The Corporate Tax Transparency report provided by the ATO, has paid little (or zero) Australian tax over the same period:

2013-2014: General Motors (Holden) Gross Income: $4,138,128,813 - Tax paid: $0
2014-2015: General Motors (Holden) Gross Income: $3,704,748,755 - Tax paid: $0
2015-2016: General Motors (Holden) Gross Income: $4,272,332,765 - Tax paid: $0
2016-2017: General Motors (Holden) Gross Income: $4,601,580,614 - Tax Paid: $0
PictureModern Motor, June 1962
Bass Coast Shire Council must understand the critical urgency to get the Victorian State Government behind this (and a conservation order slapped on the site). The decision for the future of the site will not be made by Holden – it has never had more than “operational” decision-making powers. It has, over its history, been wholly run by the GM boardroom in Detroit. GM intends to be out of Australia by 2021; it will have begun the process of sale of the proving ground (engineers across Holden are rushing to the exits).
 
One day, perhaps tomorrow, perhaps in coming weeks, we will wake to an announcement that the sale of the site has been concluded and a new owner announced. General Motors needs money. Its gross profits are down by nearly 30 per cent since 2016, as is its net income, and it is still shutting down factories in the US. There won't be any sentimentality shown here, nor any interest in the long-nosed potoroo or the environmental value of that coastal forest. GM will simply want the money to repatriate to its balance sheets there.
 
The State Government and Bass Coast Council together have powers to ensure that the people of Victoria and the Bass Coast region specifically do not let this asset, and this opportunity, slip from their grasp.
 
Tim O'Brien is a Phillip Island writer and author. He held a senior executive role in the Victorian Automobile Chamber of Commerce as managing editor of AUTO magazine and as General Manager of Government and Public Affairs. He later established The Motor Report, Australia's second largest independent automotive news site. He also owned and operated the Phillip Island Winery with Tricia his wife.

​​Not so fast, GM
March 6, 2020 - GM will probably seek to sell the Lang Lang proving ground to the highest bidder.  Mikhaela Barlow argues that Bass Coast needs to stake its claim first.  ​

Picture
Graphic Tim O’Brien from an original and rather disturbing original Holden advertisement
14 Comments
Pete Muskens
20/3/2020 12:49:46 pm

Great article Tim!
Let me know if there's any petition to sign or any other pressure we can get to bear on Government or GM to get this important area saved for conservation. It's an ongoing disgrace that so many multinational corporations are the first to come to government when they're in financial trouble, yet baulk at paying any tax as part of their quid pro quo!

Reply
Peter Dann
20/3/2020 05:18:04 pm

Great article and idea Tim.

Reply
Meryl Tobin Brown
20/3/2020 07:53:57 pm

Congratulations, Tim! A refreshing look at a possible future for the GMH Proving Ground, an incredibly valuable environmental and economic asset which should be gifted or bought for the good of the community.

Reply
Susan Linley
21/3/2020 03:59:26 pm

That's an excellent article. I do so hope the site is gifted for wildlife conservation or that council and government unite to protect it for that purpose. The income and tax figures you quote are appalling in their cost to Australians. Thank you for presenting this important article.

Reply
Geoff Ellis
21/3/2020 06:53:00 pm

Send a message to GM HQ.

Mary Barra - CEO and Chair of GM
linkedin.com/in/mary-barra-29469712

Dhivya Suryadevara GM CFO
linkedin.com/in/dhivya-suryadevara

General Motors Company
P.O. BOX 33170
Detroit, MI 48232-5170



Reply
Joan Woods
22/3/2020 10:15:12 am

Thanks Tim. It is always good to get the facts - the proving ground has always had a slightly mysterious air about it.
Anyway it can be kept as it is, count me in.

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christopher day
23/3/2020 02:30:46 pm

Good idea for tourism but at this point of time with USA virtually closed down and we not far behind not the time to pursue this.
The Governments, Company's and people around the world have more important things on their mind than a block of land in Victoria.
Nothing will happen at this time , follow up at the right time and that is certainly not now.

Reply
Gillian Armstrong
24/3/2020 04:55:34 pm

An excellent article and great idea. Not enough is being done in conservation on this scale. This is such a good opportunity for the Council and Government to move on this together, NOW, before it's too late......what possibilities, they're endless when it comes to the environment and the future. I say, act fast and act now.

Reply
Trevor Brown
26/3/2020 01:33:57 pm

I enjoyed most of Tim's article and agree that the site would be a wonderful area for conservation purposes. However I think it would have been better if Tim had not published such misleading figures. He cites Gross Income for several years and complains that no tax was paid on this income. He conveniently forgets to take into account the operating expenses of those years or to mention that in the years 2013/14 the company made an operating loss of 554 million dollars and in the year 2014/15 made an operating loss of 255 million to mention just two. The subsequent years were not much better. It was these huge losses over several consecutive years that led to GM opting out of Australia. Consequently this shows that there is a very good reason that no tax was paid during the period Tim published. Given Tim's background he must have known how misleading the article is.

Reply
Tim
3/4/2020 12:04:27 pm

Trevor, the piece clearly states that these are gross figures, there is no deception there: "gross" means gross, "net" means net. There is however quite widespread critical commentary in mainstream media about 'gross figures' and tax paid by transnational companies. Many of these companies operating wholly-owned subsidiaries can and do shift profits via transfer pricing and other shenanigans. How much of those "losses" were added to by transfer pricing? We don't know. But we do know that GM Holden repatriated $150million to GM Detroit in 2016/17. This was reported on in the AFR January 29, 2017:

"This equates to a capital return of approximately $1,500,000 on each of the 100 shares issued in the company," it (GM) said.
A spokesman for General Motors Holden said the capital return was "part of normal, ongoing financial management". (AFR, Jan 29, 2017)

"Normal, ongoing financial management"...? And I'll remind you of the very stark fact: Since 2001, GM Holden has taken $2.1billion in direct state and federal government assistance.

Reply
chris day
26/3/2020 03:59:35 pm

Trevor Browns information on GMH losses adds a new dimension to the debate. You certainly wouldn't want to approach GMH with incorrect financial information they would dismiss any discussion . I doubt they would only be interested in selling the land for the best deal for them clearly they we're in bad financial situation or they wouldn't be withdrawing from all right hand drive markets around the world not just Australia . The last few months and however long this corona virus lasts will no doubt leave them in far worse financial position .
If the Victorian community it going to obtain this parcel of land for long term benefit of the community it needs to put together a financial offer that they could accept expecting them to donate it is a waste of time . Of course as a housing estate it could provide a developer great parcel of land in an area where future housing is closer to Melbourne than areas like Wonthaggi so to stop that happening any approach to GMH has to be commercially well put together . Another question is does Bass Coast council currently collect rates for this land and if so how much is paid each year.

Reply
Trevor Brown
4/4/2020 10:02:29 am

Thanks, Tim for that lesson. I agree that Gross is Gross and Net is Net. However combining Gross receipts with Tax paid, or in this case Tax not paid, implies a different relationship between them than what is factual. With out further explanation this is clearly misleading to those who don't understand and/or don't have the knowledge. I am well aware that journalists make this type of assessment in order to make a point that may not have the same impact if the report was designed to not be ambiguous and misleading. On the whole I absolutely agree with your comments as to the desirability of using the testing site for environmental purposes. I also agree that Government should approach GM with a view to obtaining the property for these purposes. .

Reply
Catherine Watson
5/4/2020 09:26:40 am

Hi Trevor. Many of us are dubious about reported "net profits" given the "creative accounting" engaged in by so many multinational companies. For many years Facebook, Google, Microsoft, etc, artificially reduced their profits to zero to avoid paying taxes in countries like Australia.

Reply
Tim
4/4/2020 12:14:35 pm

No worries Trevor. Point taken, and good to note we're pushing for the same outcome.

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